Prepare the journal entry to establish the Petty Cash fund. Record the reimburse

Question

Prepare the journal entry to establish the Petty Cash fund.

Record the reimbursement of the petty cash fund.

Record the increase of the petty cash fund.

Palmona Co. establishes a $300 petty cash fund on January 1. On January 8, the fund shows $199 in cash along with receipts for the following expenditures: postage, $44; transportation-in, $11; delivery expenses, $13; and miscellaneous expenses, $33. Palmona uses the perpetual system in accounting for merchandise inventory. Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $350 on January 8, assuming no entry in part 2. (Hint: Make two separate entries for part 3.) View transaction list Journal entry worksheet 4 Prepare the journal entry to establish the Petty Cash fund. Note: Enter debits before credits. Date General Journal bit Credit Jan 01 Record entry Clear entry View general journal

Explanation / Answer

Date General Journal Debit Credit Jan 01 Petty cash $300 Cash $300 Jan 08 Postage expense $44 Merchandise inventory $11 Delivery expense $13 Miscellaneous expenses $33 Cash $101 Jan 08 Petty cash $50 Cash $50

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